Annual 'White Paper'

AmCham's annual White Paper is the most authoritative analysis of the commercial environment and business trends in China.

The policy recommendations in the paper for both the Chinese and US governments form the lynchpin of AmCham's extensive policy advocacy activities, which aim to continually improve the business climate in China for American companies.

The backbone of the White Paper's analyses and conclusions is the annual Business Climate Survey, a compilation of data from the responses of more than 800 companies operating in China.

The survey is a unique look into the thinking of the leaders of international business in this critical market.

Strategies

51 percent of respondents are in China primarily to sell, source or make products for the Chinese market.

74 percent of companies are either profitable or very profitable in China

88 percent of companies saw increased revenue compared to last year.

65 percent of companies saw improved operating margins of their China operations.

Top challenges

Management-level human resources constraints emerged as the top "Business Challenge," with 37 percent of respondents ranking it as a top-5 concern.

71 percent of members thought that China was losing at least some competitive advantage due to rising costs, but most companies have no plans to relocate out of China.

Respondents reported improvements in US visa processing and intellectual property rights enforcement compared to previous years.

Approximately 80 percent of companies reported difficulty attracting, developing and retaining managers and skilled workers (up almost 10 percent from last year).

Outlook

89 percent of respondents have an optimistic or slightly optimistic outlook for the next five years of doing business in China, and 79 percent said that they were more optimistic this year compared to last year.

83 percent of companies plan to expand capacity in 2008, and 23 percent intend to acquire a Chinese company.

41 percent of companies have plans to expand in some form into China's second- and third-tier cities.

Chinese economic slowdown remains the top "Risk for the Coming Years" with 36 percent of respondents ranking it as a top-5 concern, while "labor costs" jumped 9 percent to surpass "Chinese protectionism" as the risk for the future.

(China Daily 07/04/2008 page22)